Research Memo 1

Acme Motors sells and leases automobiles. Acme administers a leasing program for its employees. The lease terminates automatically if the employee (lessee) ceases to be employed by Acme. The leases make autos available solely for the lessee’s personal use; they do not involve use of the automobile in the employee’s employment-related activities for Acme. The leased vehicles are registered and titled in Acme’s name, and Acme pays all registration fees, insurance, and maintenance costs.


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